Capital gains tax (CGT) is the tax that Zimbabwe levies when a person sells, or is treated as selling, a specified asset — and makes a gain in the process. It is governed by its own dedicated statute, the Capital Gains Tax Act [Chapter 23:01] (in this chapter, "the CGT Act" or simply "the Act"), which has operated since its date of commencement, 1 August 1981. The charging provision is Section 6: it charges, levies and collects a capital gains tax "in respect of the capital gains … received by or accrued to or in favour of any person during any year of assessment", limited to gains arising from sales of specified assets on or after 1 August 1981. The amount of tax is then calculated under Section 7, which sends you to the Finance Act [Chapter 23:04] for the rate. This two-statute design — a permanent structural Act plus an annual rate-fixing Finance Act — is the same architecture you met in the income tax stream, and it means the rate of CGT is always year- and currency-specific.

The entire machinery turns on three defined amounts in Section 8(1), which you must keep rigorously distinct. The "gross capital amount" is the total amount received by or accrued to a person from a source within Zimbabwe from the sale of specified assets, excluding any amount the taxpayer proves is "gross income" under Section 8(1) of the Income Tax Act [Chapter 23:06]. The "capital amount" is the gross capital amount less the exemptions in Section 10. The "capital gain" is the capital amount less the deductions allowed by Section 11 (cost of acquisition, improvements, selling expenses, and the inflation allowance). CGT bites on the capital gain (post-2019 assets) or on the gross capital amount (pre-2019 assets), depending on the rate that applies.

The class of assets caught is deliberately narrow. A "specified asset" (Section 2) is only (a) immovable property, (b) any marketable security, or (c) a right or title to property registered or required to be registered under a list of intellectual-property and mining statutes. Disposing of your car, your trading stock, or your tractor is not a CGT event — those fall outside the charge entirely (and may instead be income-tax matters). This narrowness is the single most important orientation point in the whole subject: CGT is a tax on the disposal of land, securities and registered rights, and nothing else.

The boundary between CGT and income tax is mutually exclusive and policed by the words "excluding any amount … proved … to constitute 'gross income'" in the Section 8(1) definition of gross capital amount. An amount cannot be both ordinary income and a capital gain. As established in the income tax lesson on Capital vs Revenue Receipts, the taxpayer carries the onus of proving an amount is capital; if it is capital and it arises from a specified asset, CGT is the relevant head. The Act even reaches gains that look "tax-free": in Old Mutual Zimbabwe Ltd v Commissioner-General, ZIMRA 16-HH-143 the proceeds of shares sold by employees through an indigenisation share trust to meet their PAYE obligations were held to be amounts liable to CGT.

The rates matter enormously and hinge on a single date — 22 February 2019, the day the Zimbabwe dollar was re-floated. Under Section 38 of the Finance Act, a specified asset acquired before 22 February 2019 is taxed at 5% of the gross capital amount (i.e. 5 cents per dollar of gross proceeds, with no deduction of cost), while a specified asset acquired after 22 February 2019 is taxed at 20% of the capital gain (i.e. 20 cents per dollar of the gain after deductions). A parallel capital gains withholding tax regime in Part IIIA of the CGT Act and Section 39 of the Finance Act requires conveyancers, depositaries and agents to withhold tax at source — 1% on listed securities (a final tax), 5% on other marketable securities, and 15% (provisional, against a final 20% of the gain) on immovable property acquired after 22 February 2019.

Finally, CGT is administered through the Income Tax Act's machinery: returns and assessments (Section 23 applies Taxes Act Sections 37–52), objections and appeals (Section 25 — a 30-day objection to the Commissioner, then the Special Court), and payment and recovery (Section 26). The practical centrepiece for an ordinary taxpayer is the CGT 1 return and the requirement that no transfer of immovable property registers without a CGT clearance. This introductory lesson maps the whole territory; the lessons that follow drill into each component — the legal framework, specified assets, disposals, deductions, the inflation allowance, exemptions, the principal private residence relief, the rates, withholding, suspensive sales, administration, objections and appeals, and cross-border issues.

Every tax system must answer a deceptively simple question: when a person sells something for more than it cost, is the profit taxed, and if so, how? In Zimbabwe the answer depends on the character of the thing sold and of the profit. If a trader sells goods in the ordinary course of business, the profit is revenue and falls into gross income under Section 8(1) of the Income Tax Act [Chapter 23:06], taxed as ordinary income. But if a person sells a capital asset — something held as part of the income-earning structure rather than as part of the income-earning stream — the profit is of a capital nature, and Section 8(1) of the Income Tax Act expressly excludes "amounts proved by the taxpayer to be of a capital nature" from gross income. That exclusion would leave such gains entirely untaxed were it not for a separate, purpose-built statute. Capital gains tax is the tax that fills that gap for a defined set of assets.

To anchor the idea from first principles, picture a fruit tree. The fruit is income — it is produced repeatedly by the income-earning structure and is consumed or sold as part of the ongoing stream. The tree itself is capital — it is the structure that produces the fruit. Selling the fruit is an income transaction; selling the tree is a capital transaction. Income tax taxes the fruit. Capital gains tax taxes the profit on selling the tree — but only where the "tree" is one of the specified assets Parliament has chosen to bring within the charge. This "tree versus fruit" metaphor (the fixed versus floating capital distinction you studied in Capital vs Revenue Receipts) is the conceptual seed of the entire CGT subject.

Why does Zimbabwe levy CGT at all? Three policy reasons stand out. First, equity: a person who grows wealthy by buying and selling land or shares enjoys a real economic gain, and taxing it spreads the fiscal burden more fairly than leaving such gains untouched while wages are taxed at up to 40%. Second, anti-avoidance and base protection: without a CGT, taxpayers would have a powerful incentive to dress up income transactions as capital ones to escape tax entirely; the CGT closes that escape hatch for land and securities. Third, revenue: property and share transactions are high-value, relatively visible (land transfers pass through the Deeds Registry; share trades pass through brokers and depositaries), and therefore administrable — which is why the Act builds withholding obligations onto the very intermediaries who handle the transactions.

Where does CGT sit in the broader tax framework? It is a transaction tax on disposal, not a tax on income or on holding. You do not pay CGT because you own a farm or a parcel of shares; you pay it when you dispose of them and realise a gain. It is separate from income tax but deeply interlocked with it: the CGT Act borrows the Income Tax Act's definitions, its returns-and-assessments machinery, its representative-taxpayer rules, and its objections-and-appeals procedure (Sections 23, 24 and 25 of the CGT Act all apply named provisions of the Taxes Act mutatis mutandis). It is also distinct from estate duty (which taxes the transmission of property on death under the Estate Duty Act [Chapter 23:03]) and from transfer/stamp duties (which tax the act of registration). A single disposal of land can attract CGT and stamp duty; the heads do not cancel each other out.

CGT is highly examinable and a frequent source of ZIMRA audit interest, for several reasons. The capital-versus-income characterisation is litigated constantly. The rate depends on an acquisition date that is easy to get wrong. The principal private residence and over-55 reliefs are valuable and frequently mis-claimed. The withholding regime imposes duties on third parties (conveyancers, brokers) who can be made personally liable for tax they fail to withhold. And the inflation allowance — which protects taxpayers from being taxed on purely inflationary "gains" — is a computational trap. A practitioner who masters CGT therefore adds real value, because the margins for error (and for legitimate planning) are wide.

CGT is a creature of statute, and almost everything you need is found in two Acts read together, supplemented by ZIMRA's external guides.

The Capital Gains Tax Act [Chapter 23:01]

The Act is arranged into Parts. Part I (Preliminary) contains the short title (Section 1) and the interpretation Section (Section 2). Part II (Administration) delegates the Commissioner's functions. Part III (Capital Gains Tax) is the heart of the statute — Sections 6 to 22 — containing the charge, the calculation rule, the key definitions, the deemed-accrual rule, the exemptions, the deductions, and a series of special-case provisions (damage/destruction, fair market price, intra-group and inter-spouse transfers, suspensive and credit sales, principal private residences, and the substitution of business property). Part IIIA contains the capital gains withholding tax (Sections 22A–22L). Part IV deals with returns and assessments, Part V with representative taxpayers, Part VI with objections and appeals, Part VII with payment and recovery, and Part VIII with general matters including double-taxation relief, anti-avoidance, and returns by the Registrar of Deeds and financial institutions.

The charging section is Section 6. Read it carefully, clause by clause:

"There shall be charged, levied and collected throughout Zimbabwe for the benefit of the Consolidated Revenue Fund a capital gains tax in respect of the capital gains, as defined in this Part, received by or accrued to or in favour of any person during any year of assessment, other than a capital gain so received or accrued prior to the 1st August, 1981."

Five load-bearing elements emerge. (1) "charged, levied and collected throughout Zimbabwe" — the tax is national and its proceeds go to the Consolidated Revenue Fund. (2) "capital gains tax in respect of the capital gains, as defined in this Part" — what is taxed is the capital gain, a term with a precise statutory meaning in Section 8. (3) "received by or accrued to or in favour of any person" — the tax reaches both actual receipts and mere accruals (entitlements), and "any person" is wide: it includes individuals, companies, trusts and deceased estates (by virtue of the borrowed Income Tax Act definition of "person", which — as established in Persons Liable to Income Tax in Zimbabwe — excludes a partnership, partners being taxed individually). (4) "during any year of assessment" — the tax is periodic, measured over the year of assessment. (5) the 1 August 1981 cut-off — gains accrued before that date are outside the charge.

Section 7 (Calculation of capital gains tax) then provides that, subject to Section 21 (the principal private residence provision), the tax "shall be calculated in accordance with the Finance Act [Chapter 23:04] by reference to (a) the capital gains of the person in the year of assessment; and (b) the rate of capital gains tax fixed from time to time in that Act." This is the same two-statute design you learned in Introduction to Taxation in Zimbabwe: the CGT Act supplies the structure (what is taxed and how the base is computed) while the Finance Act supplies the rate (how much). A useful authority on the administrative consequence of Section 7 is Sabeta M v Commissioner-General, ZIMRA 12-HH-079, where it was held that ZIMRA is not permitted to refuse to assess and to issue a CGT certificate once the tax has been paid.

Section 8 (Interpretation of terms relating to capital gains tax) defines the three amounts that drive every computation. Because they are the spine of the subject, they are set out in full in Section C below. Section 8(2) supplements the definition of "gross capital amount" with a battery of deeming rules that treat various non-sale events as sales (disposals otherwise than by sale, expropriations, sales in execution, maturities/redemptions, transfers of deed-of-sale rights, transfers of stand rights, and the relinquishment of condominium membership). Section 9 deems a capital amount to have accrued in the circumstances set out in Sections 10(1) and (2) of the Taxes Act, applied mutatis mutandis.

The remaining Part III sections each govern a discrete topic that later lessons expand: Section 10 (exemptions), Section 11 (deductions allowed, including the inflation allowance in Section 11(2)(c)), Section 12 (deductions disallowed where the sale is exempt), Section 13 (damage to or destruction of a specified asset), Section 14 (determination of fair market price), Section 15 (transfers between companies under the same control), Section 16 (transfers between spouses), Section 17 (transfer of business property by an individual to a company under his control), Section 18 (sales of immovable property under suspensive conditions), Section 19 (credit sales where ownership passes), Section 20 (reductions in costs of specified assets), Section 21 (principal private residences), and Section 22 (substitution of business property).

The Finance Act [Chapter 23:04]

The Finance Act fixes the rates. The CGT rates live in its capital gains tax chapter at Section 38 (Rates of capital gains tax) and Section 39 (Rates of capital gains tax withholding tax), with Section 39A governing payment in foreign currency. The current Section 38 was substituted several times — by Act 5 of 2009, then by Finance (No. 2) Act 7/2019, then by Finance Act 7/2021 (gazetted 31 December 2021, backdated to 22 February 2019) — and it now turns the rate on whether the asset was acquired before or after 22 February 2019. The detailed figures are set out in Section C and in the rate table at the end of this lesson; the full treatment is in the dedicated lesson Rates of CGT.

Old law versus current law

Two amendments are worth flagging at the outset because they recur throughout the chapter. First, the acquisition-date threshold that splits the 5% and 20% regimes is 22 February 2019, not 1 February 2009. The 1 February 2009 date was relevant to the previous re-pegging (when the economy "dollarised"), and older notes and even the queue pointers sometimes still cite it. The governing source — Section 38 of the Finance Act as amended by Finance Act 7/2021, backdated to 22 February 2019 — is unambiguous, and this lesson uses 22 February 2019. Second, paragraph (c) of the "specified asset" definition (the registered-rights limb) was substituted by Finance Act 2 of 2017 (backdated to 1 January 2017) to its present, expanded list of intellectual-property and mining statutes. Where the sources reveal such changes, this chapter states the old rule, the new rule, and the practical impact — the defining TAXTAMI old-versus-new contrast.

ZIMRA guidance

For the administrative layer, ZIMRA publishes the Comprehensive Guide to Form CGT 1 (the return for disposals of immovable property and unlisted securities) and the Special CGT Return guide, as well as public notices on CGT clearance and withholding. These give the practical procedure that the Act assumes but does not spell out, and they are relied on in the Administration, Returns and Assessments, and Withholding Tax on CGT lessons.

The whole of CGT can be reduced to a single funnel that narrows the proceeds of a disposal down to the gain and then applies a rate. We build it term by term.

Concept 1 — the "specified asset" gateway

Nothing happens under the CGT Act unless the thing disposed of is a specified asset. Section 2 defines it exhaustively:

"specified asset" means— (a) immovable property; or (b) any marketable security; or (c) any right or title to property whether tangible or intangible that is registered or required to be registered in [the Mines and Minerals Act, the Patents Act, the Trade Marks Act, the Industrial Designs Act, the Copyright and Neighbouring Rights Act, the Brands Act, the Geographical Indications Act, or the Integrated Circuit Layout-Designs Act].

Take each limb in turn. (a) Immovable property means land and the things permanently attached to it — houses, farms, commercial and industrial buildings, residential stands. (b) A marketable security is defined in Section 2 as "(a) any bond capable of being sold in a share market or exchange; or (b) any (i) debenture, share or stock; or (ii) right possessed by reason of a person's participation in any unit trust; whether or not capable of being sold in a share market or exchange." Crucially, the section adds that "share" includes a member's interest in a private business corporation — so selling your interest in a PBC is a CGT event just as selling shares in a company is. (c) Registered rights brings intellectual property and mining title into the net: a mining claim or right registered under the Mines and Minerals Act [Chapter 21:05], a patent, a registered trade mark, a registered industrial design, copyright, a registered brand, a geographical indication, or an integrated-circuit layout-design. This limb was substituted by Finance Act 2 of 2017 to its current expanded form.

The decisive corollary is what is left out. Motor vehicles, plant and machinery, trading stock, livestock, furniture, debts, cash and foreign currency are not specified assets. A profit on selling them is simply outside the CGT charge — which does not mean it is tax-free, because if the asset was held on revenue account the profit is ordinary income under the Income Tax Act, and if capital allowances were claimed there may be a recoupment (as you saw in Capital vs Revenue Receipts). The first question in every CGT problem is therefore: is this a specified asset? If no, stop — there is no CGT.

Concept 2 — the disposal (and the deeming rules)

CGT is a tax on disposal, and the paradigm disposal is a sale. But Parliament knew that taxpayers can shift value without a textbook sale, so Section 8(2) deems a range of events to be sales at fair market price:

• (b) Disposal otherwise than by sale — e.g. a donation, a distribution, or a transfer for no or inadequate consideration — is "deemed to be a sale", and an amount equal to the fair market price at the time of disposal is deemed to have accrued. This is the rule applied in R (Pvt) Ltd v ZIMRA 19-HH-792. (A proviso excludes a company's donation of immovable property to an approved employee housing trust fund.)
• (c) Expropriation — a specified asset that is expropriated is deemed sold for the compensation paid (with a carve-out for persons listed in Schedule 1 to the Global Compensation Deed, substituted by Finance Act 13/2023 w.e.f. 1 January 2024).
• (d) Sale in execution of a court order — the execution price is deemed to have accrued to the person on whose behalf it was sold.
• (e) Maturity or redemption of a specified asset (or analogous circumstances) — the asset is deemed sold for the amount accruing.
• (f) Transfer of rights under a deed of sale — assigning your rights as purchaser under a deed of sale is deemed a sale of the specified asset for the whole amount received.
• (g) Transfer of rights in a stand — transferring rights in a residential, commercial or industrial stand, serviced or not, registered or not, is a deemed sale (inserted by Act 1/2014).
• (h) Relinquishing a condominium membership interest — deemed a sale for the amount received (inserted by Act 1/2014).

These deeming rules are the subject of the Disposal of Assets and Deemed Sales lessons. The point to absorb now is that you cannot escape CGT merely by avoiding the word "sale" — donations, distributions, expropriations and assignments are all caught.

Concept 3 — the three amounts: gross capital amount → capital amount → capital gain

Once you have a specified asset and a (deemed) disposal, Section 8(1) supplies the base:

(a) "Gross capital amount" means —

"the total amount received by or accrued to or in favour of a person or deemed to have been received by or to have accrued to or in favour of a person in any year of assessment from a source within Zimbabwe from the sale on or after the 1st August, 1981, of specified assets excluding any amount so received or accrued which is proved by the taxpayer to constitute 'gross income' as defined in subsection (1) of Section 8 of the Taxes Act and includes any amount allowed to be deducted in terms of subsection (2) of section eleven which has been recovered or recouped" —

with a proviso that, for the bodies in subparagraphs (a), (c) and (f) of paragraph 2 of the Third Schedule to the Taxes Act, an amount that is proved to be gross income nonetheless constitutes a gross capital amount. Three features deserve emphasis. First, source within Zimbabwe is the gateway — like income tax, CGT is source-based, not residence-based (cross-border consequences are explored in CGT on Cross-Border Asset Transfers). Second, the carve-out of amounts proved to be gross income is what makes CGT and income tax mutually exclusive: the same dollar cannot be both. Third, the recoupment inclusion drags back into the gross capital amount any Section 11(2) deduction that has later been recovered.

(b) "Capital amount" means "the amount remaining of the gross capital amount of any person, after deducting therefrom any amounts exempt from capital gains tax under this Act." So: gross capital amount less Section 10 exemptions = capital amount.

(c) "Capital gain" means "the amount remaining, after deducting from the capital amount of any person all the amounts allowed to be deducted from a capital amount under this Act." So: capital amount less Section 11 deductions = capital gain.

Lay these out as a funnel:

 Proceeds of sale of a specified asset (source in Zimbabwe)
 - amounts proved to be "gross income" (income tax, not CGT)
 ----------------------------------------------------------
 = GROSS CAPITAL AMOUNT (Section 8(1)(a))
 - exemptions (Section 10)
 ----------------------------------------------------------
 = CAPITAL AMOUNT (Section 8(1)(b))
 - allowable deductions (Section 11): cost, improvements,
 selling expenses, bad debts, AND the inflation allowance
 ----------------------------------------------------------
 = CAPITAL GAIN (Section 8(1)(c))
 x rate (Finance Act Section 38)
 ----------------------------------------------------------
 = CAPITAL GAINS TAX PAYABLE

Concept 4 — the deductions and the inflation allowance (Section 11)

Section 11 lists the amounts deductible in arriving at the capital gain: (a) expenditure incurred on the acquisition or construction of the asset sold (with special rules deeming a cost where the asset was inherited or acquired otherwise than by purchase); (b) expenditure on additions, alterations or improvements; (c) the inflation allowance — an amount determined by a formula; (d) expenditure directly incurred in connection with the sale (agent's commission, conveyancing, advertising); (e) certain bad debts; and (f) taxed legal costs of a successful appeal. The inflation allowance in Section 11(2)(c) was repealed and substituted by Finance Act 7/2021 (w.e.f. 31 December 2021) and is now a consumer-price-index (CPI) indexation of cost: in essence it multiplies the cost (and improvements) by the ratio of the All Items CPI at disposal to the All Items CPI at acquisition/improvement, so that only the real gain — the gain above inflation — is taxed. Its precise operation, including the formula variables A, B and C, is worked through in the Allowable Deductions and Calculation of Capital Gain lessons. Two limits frame it: Section 12 disallows any deduction relating to an exempt disposal, and the Non-Permissible Deductions lesson (Non-Permissible Deductions) collects the expenditures that never qualify.

Concept 5 — the rate and the 22 February 2019 split (Finance Act Section 38)

The rate is not in the CGT Act; Section 7 sends you to Section 38 of the Finance Act, which provides:

• (a) for a specified asset acquired before 22 February 2019: tax at 5 cents per dollar (5%) of the gross capital amount (USD$0.05 per US dollar of gross proceeds). Note that the base is the gross amount, not the gain — no cost is deducted, but the rate is low.
• (b) for a specified asset acquired after 22 February 2019: tax at 20 cents per dollar (20%) of the capital gain (USD$0.20 per US dollar of the gain, computed after the Section 11 deductions including the inflation allowance).

The policy logic is transitional. Pre-2019 assets were bought in a different currency environment, where reliably reconstructing a real cost base is difficult; Parliament therefore taxes them on a flat, low percentage of gross proceeds. Post-2019 assets have a reliable USD cost base, so they are taxed on the true gain at a higher rate. The boundary is the acquisition date of the asset, not the date of sale. The detail (including the foreign-currency mechanics of Section 39A and the now-repealed transitional subparagraph) is in How to Calculate Capital Gains Tax (Step-by-Step).

Concept 6 — withholding at source (Part IIIA / Finance Act Section 39)

Because land and share transactions pass through intermediaries, the Act builds a capital gains withholding tax onto them in Part IIIA, with rates in Section 39 of the Finance Act: 1% of the sale price on a listed marketable security (reduced from 2% by Finance Act 7/2024 w.e.f. 28 December 2024, and a final tax); 5% on other (unlisted) marketable securities; and 15% of the price (provisional) on immovable property acquired after 22 February 2019, set against a final assessment at 20% of the gain. Depositaries (Section 22C), agents (Section 22D) and, failing them, the payee (Section 22E) must account for the tax, and the withheld amount is credited against the final CGT liability (Section 22J). Withholding is the engine of CGT collection and is treated fully in Capital Gains Withholding Tax and Role of Intermediaries and Depositaries.

Concept 7 — the year of assessment, accrual and timing

CGT is measured "during any year of assessment" (Section 6), the year of assessment being the same 12-month period used for income tax (Introduction to Taxation in Zimbabwe). The tax attaches on receipt or accrual, and Section 9 imports the Income Tax Act's deemed-accrual rules. Timing becomes intricate where the price is paid in instalments: suspensive (instalment) sales (Section 18) and credit sales where ownership passes (Section 19) have their own spreading rules, examined in Suspensive Sales. For ordinary cash sales, payment of the tax falls due under Section 26 — broadly within 30 days of the relevant accrual for suspensive and credit sales — and is explored in Payment of CGT and Clearance Certificates.

Individuals

Worked example 1 — sale of a residential property acquired post-2019 (20% on the gain). Tendai bought a townhouse in Harare in March 2021 for USD 80,000 and sold it in 2025 for USD 120,000. She paid the estate agent USD 6,000 in commission and conveyancing on sale. Assume, for illustration, that the inflation allowance indexes her cost (and that the residence does not qualify for the principal private residence relief because she let it out — PPR is covered in CGT on Property Sales). The asset was acquired after 22 February 2019, so the 20% of capital gain regime applies.

Worked example 2 — sale of a property acquired pre-2019 (5% on the gross). Mr Ncube inherited a house valued at USD 40,000 in 2010 and sells it in 2025 for USD 70,000. Because the asset was acquired before 22 February 2019, the rate is 5% of the gross capital amount, and no cost is deducted:

Notice how the two regimes diverge: on the post-2019 asset the tax is 20% of a net gain; on the pre-2019 asset it is 5% of gross proceeds. The pre-2019 method ignores cost entirely, which can be favourable where the asset has appreciated enormously and unfavourable where the gain is thin.

Worked example 3 — shares. Rumbi sells listed shares on the Zimbabwe Stock Exchange for USD 10,000. The broker/depositary withholds 1% capital gains withholding tax = USD 100, which is a final tax on listed securities — Rumbi has no further CGT to compute or pay on that disposal. Had the shares been unlisted, the withholding would be 5% (USD 500) and a return/assessment would follow.

SMEs and partnerships

For a small business, the most common CGT events are the sale of business premises and the sale of shares or a member's interest in a private business corporation (PBC). Two reliefs are pivotal. Under Section 17, an individual who transfers business property to a company under his control can roll the gain over rather than crystallise it immediately, easing incorporation. Under Section 22, a taxpayer who sells business property and reinvests in replacement business property can claim substitution (roll-over) relief, deferring the gain. These are central to the Corporate Restructuring and Special Rules lessons. Remember from Persons Liable to Income Tax in Zimbabwe that a partnership is transparent: each partner is taxed on his share, so a disposal of partnership land is apportioned among the partners for CGT.

Illustration. A PBC member sells her member's interest (a "share", and therefore a marketable security and a specified asset) for USD 50,000, having paid USD 30,000 for it after 22 February 2019. With selling costs of USD 2,000 and an illustrative inflation allowance of USD 3,000, the capital gain is USD 50,000 − 30,000 − 2,000 − 3,000 = USD 15,000, taxed at 20% = USD 3,000 (less any 5% withholding already deducted on the unlisted security, which is credited).

Large corporates and multinationals

For large companies the CGT issues are structural: disposals of subsidiaries (share sales), group reorganisations, and the interaction with withholding and clearance procedures that can hold up a transaction's closing. Section 15 allows specified assets to be transferred between companies under the same control on a roll-over basis, so that an internal reorganisation does not trigger a dry tax charge. Multinationals must also watch the source rule — only gains from a source within Zimbabwe are within the charge — and any double-taxation agreement that allocates taxing rights over immovable-property gains (typically to the country where the land is situated). A special regime, Section 30B, imposes a special CGT on entities acquiring a mining title or any interest therein, relevant to the extractive sector. These threads are pulled together in CGT on Cross-Border Asset Transfers, Special CGT Rules for Business and Asset Transfers and CGT Treatment of Corporate Restructuring. A leading reminder that capital characterisation does not equal tax-freedom is Old Mutual Zimbabwe Ltd v Commissioner-General, ZIMRA 16-HH-143 — the corporate share-trust proceeds were CGT-liable.

Zimbabwean CGT jurisprudence is modest but instructive, and it is reinforced by the rich income-tax capital-versus-revenue case law you already studied.

Old Mutual Zimbabwe Ltd v Commissioner-General of ZIMRA & ZIMRA 16-HH-143. Proceeds of shares sold by employees, through an indigenisation employees' share-trust scheme, to meet their PAYE obligations were held to constitute an amount liable for capital gains tax. The principle: labelling a structure "capital" or "employee benefit" does not exempt it; if a specified asset (here, shares) is disposed of and a capital amount arises, CGT applies. This case is annotated against Section 8(1)(a) in the source Act.

R (Pvt) Ltd v ZIMRA 19-HH-792. Annotated against Section 8(2)(b), this decision illustrates the deemed-sale-at-fair-market-price rule: where a person disposes of a specified asset otherwise than by way of sale, the disposal is deemed a sale and the fair market price is deemed to accrue. The principle: non-sale disposals (donations, distributions, undervalue transfers) are caught, and value is imputed at market price — you cannot strip a gain out of the CGT net by transferring at an artificially low price.

Sabeta M v Commissioner-General, ZIMRA 12-HH-079. Annotated against Section 7, the court held that ZIMRA cannot refuse to assess and issue a CGT certificate once the tax has been paid. The principle protects taxpayers: the clearance that unlocks a property transfer is an entitlement, not a discretion to be withheld, once the liability is settled.

Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361 and Ellis N.O. v Commissioner of Taxes 92-SC-001. Both annotated against the Section 10(c) exemption (bonds/stock representing loans to the State, local authorities and statutory corporations), these older authorities inform how the exemptions are read. They are explored in Capital Gains Tax Exemptions.

For the capital-versus-income boundary that decides whether CGT (rather than income tax) is the relevant head at all, the controlling body of authority is the income-tax line summarised in Capital vs Revenue Receipts — including PL Mines 15-HH-466, CF (Pvt) Ltd 18-HH-099, Zimplats 23-SC-016 and the persuasive South African and English tests (Visser, Californian Copper, Stott, Natal Estates, John Bell). Those tests determine intention, the scheme-of-profit-making question, and the fixed-versus-floating-capital distinction; only once an amount is shown to be capital does the CGT Act engage. (Foreign-test citations are persuasive only and should be verified before being quoted.)

Pitfall 1 — treating every asset sale as a CGT event. CGT only touches specified assets (immovable property, marketable securities, registered rights). A profit on a vehicle, plant, stock or debt is not CGT; mis-routing it wastes time and can mask a real income-tax (or recoupment) liability. Correct approach: always run the Section 2 "specified asset" test first.

Pitfall 2 — using the wrong date threshold. The 5%/20% split turns on 22 February 2019, not 1 February 2009. Applying the older date — or keying off the sale date instead of the acquisition date — produces the wrong rate and base. Correct approach: identify when the asset was acquired; before 22 February 2019 → 5% of gross; after → 20% of the gain.

Pitfall 3 — confusing the base. Under the 5% regime the base is the gross capital amount (no cost deducted); under the 20% regime it is the capital gain (cost and inflation allowance deducted). Practitioners routinely deduct cost in a 5% case (understating tax) or forget the inflation allowance in a 20% case (overstating tax). Correct approach: match the base to the rate.

Pitfall 4 — ignoring the inflation allowance. Omitting the Section 11(2)(c) allowance taxes purely inflationary "gains", inflating the client's liability. Correct approach: always index the cost base for post-2019 assets before applying 20%.

Pitfall 5 — assuming withholding is the end of the matter. Withholding is final only on listed securities (1%). On immovable property the 15% withheld is provisional, credited against a final 20% assessment; on unlisted securities the 5% withheld is likewise credited. Treating provisional withholding as a final tax leaves the return unfiled and the balance unpaid. Correct approach: file the CGT 1 and reconcile the withholding as a credit.

Pitfall 6 — conflating CGT with income tax (or double-counting). Because gross capital amount excludes amounts proved to be gross income, the same receipt cannot be taxed under both heads — but a taxpayer who cannot prove the capital nature may find the amount taxed as income at up to 40% rather than at the lower CGT rates. Correct approach: document the capital character (intention, holding period, purpose) to satisfy the Section 8(1) onus.

Pitfall 7 — forgetting the clearance and timing. A transfer of immovable property cannot register without a CGT clearance, and the tax falls due under Section 26 (broadly within 30 days for suspensive/credit sales). Missing this stalls the conveyance and attracts interest and penalties. Correct approach: build the CGT clearance into the transaction timetable.

Work through the questions one at a time. Choose an answer and it is graded immediately, with an explanation and the provision it comes from. Your progress is saved, so you can stop and resume.

• CGT is a separate, statute-based tax under the Capital Gains Tax Act [Chapter 23:01] (commenced 1 August 1981), charged by Section 6 and calculated under Section 7 by reference to the rate fixed in the Finance Act [Chapter 23:04] — the same two-statute design as income tax.
• CGT touches only "specified assets" (Section 2): immovable property, marketable securities (including a member's interest in a PBC), and registered IP/mining rights. If the thing sold is not a specified asset, there is no CGT.
• It is a tax on disposal, and Section 8(2) deems donations, distributions, expropriations, executions, maturities and rights-transfers to be sales at fair market price — you cannot escape by avoiding the word "sale" (R (Pvt) Ltd v ZIMRA 19-HH-792).
• Three amounts run the computation (Section 8(1)): gross capital amount → (less Section 10 exemptions) → capital amount → (less Section 11 deductions, including the inflation allowance) → capital gain.
• CGT and income tax are mutually exclusive: the gross capital amount excludes amounts proved to be gross income, so the taxpayer must discharge the capital-nature onus; capital character is not tax-freedom (Old Mutual 16-HH-143).
• Rates hinge on 22 February 2019 (Finance Act Section 38): 5% of the gross capital amount for assets acquired before, 20% of the capital gain for assets acquired after — keyed to the acquisition date, not the sale date.
• Withholding (Part IIIA / Finance Act Section 39) collects the tax through intermediaries: 1% final on listed securities, 5% on unlisted securities, 15% provisional on post-2019 immovable property (credited against a final 20%).
• Administration runs on the Income Tax Act's machinery: returns/assessments (Section 23), objections within 30 days then the Special Court (Section 25), and payment/recovery (Section 26) — anchored in practice by the CGT 1 return and the clearance required before any transfer registers (Sabeta M v Commissioner-General 12-HH-079).
• Big-picture policy: CGT promotes equity (taxing real gains on wealth assets), protects the income-tax base (closing the capital-disguise escape route), and is administrable because land and share transactions pass through registries and intermediaries that the Act conscripts as collectors.

Table 1 — CGT at a glance

Table 2 — the two rate regimes compared

Table 3 — CGT versus income tax (the boundary)

Diagram 1 — determining CGT treatment of a disposal

flowchart TD
 A[Person disposes of an asset] --> B{Is it a specified asset - immovable property, marketable security, registered right}
 B -->|No| C[Outside CGT - consider income tax or recoupment]
 B -->|Yes| D{Is there a disposal or deemed disposal - sale, donation, expropriation, transfer}
 D -->|No| E[No CGT event yet]
 D -->|Yes| F{Amount proved to be gross income under ITA Section 8}
 F -->|Yes| G[Taxed as income, not CGT - mutually exclusive]
 F -->|No| H[Compute gross capital amount]
 H --> I[Less exemptions Section 10 = capital amount]
 I --> J{Acquired before 22 Feb 2019}
 J -->|Yes| K[CGT = 5 percent of gross capital amount]
 J -->|No| L[Less deductions Section 11 incl inflation allowance = capital gain]
 L --> M[CGT = 20 percent of capital gain]
 K --> N[Account for withholding credits and file CGT 1]
 M --> N

Statutes & sections

• Capital Gains Tax Act [Chapter 23:01] — Section 1 (short title; commenced 1 Aug 1981); Section 2 (interpretation: definitions of "specified asset", "marketable security", "share", "principal private residence"); Section 6 (charging section); Section 7 (calculation by reference to the Finance Act rate); Section 8(1) (definitions of "gross capital amount", "capital amount", "capital gain") and Section 8(2) (deemed-sale rules (b)–(h)); Section 9 (deemed accrual, applying Taxes Act Section 10); Section 10 (exemptions); Section 11 (deductions, including the Section 11(2)(c) inflation allowance, substituted by Finance Act 7/2021); Section 12 (no deductions where the disposal is exempt); Section 13 (damage/destruction); Section 14 (fair market price); Sections 15–17 (transfers within control / to spouses / to a controlled company); Sections 18–19 (suspensive and credit sales); Section 21 (principal private residence); Section 22 (substitution of business property); Part IIIA (Sections 22A–22L) (capital gains withholding tax); Section 23 (returns/assessments, applying Taxes Act Sections 37–52); Section 24 (representative taxpayers); Section 25 (objections and appeals — 30-day objection, applying Taxes Act Sections 62–70); Section 26 (day and place for payment); Section 30B (special CGT on mining-title acquisitions).
• Finance Act [Chapter 23:04] — Section 38 (rates of CGT: 5% of gross capital amount for assets acquired before 22 Feb 2019; 20% of capital gain for assets acquired after 22 Feb 2019; substituted by Finance Act 7/2021, backdated to 22 Feb 2019); Section 39 (CGT withholding rates: 1% listed (reduced from 2% by FA 7/2024), 5% unlisted, 15% provisional on post-2019 immovable property); Section 39A (payment of CGT in foreign currency).
• Income Tax Act [Chapter 23:06] — Section 8(1) (gross income; the capital exclusion that creates the space CGT fills); Third Schedule (exempt bodies referenced by CGT Section 10); Sections 37–52, 62–70 (returns, assessments, objections, appeals applied by CGT Sections 23 and 25). See Capital vs Revenue Receipts, Introduction to Taxation in Zimbabwe, Persons Liable to Income Tax in Zimbabwe.

Case law (as annotated in the source Acts)

• Old Mutual Zimbabwe Ltd v Commissioner-General of ZIMRA & ZIMRA 16-HH-143 — proceeds of shares sold via an indigenisation employees' share trust to meet PAYE were liable to CGT (capital character ≠ tax-free).
• R (Pvt) Ltd v ZIMRA 19-HH-792 — disposal otherwise than by sale is deemed a sale at fair market price (Section 8(2)(b)).
• Sabeta M v Commissioner-General, ZIMRA 12-HH-079 — ZIMRA cannot refuse to assess and issue a CGT certificate once tax is paid (Section 7).
• Commissioner of Taxes v C W (Pvt) Ltd 89-ZLR-361; Ellis N.O. v Commissioner of Taxes 92-SC-001 — exemption for loan stock to the State, local authorities and statutory corporations (Section 10(c)).

ZIMRA guidance

• Comprehensive Guide to Form CGT 1 (ZIMRA External Guide) — completing the CGT return for immovable property and unlisted securities.
• Special CGT Return guide — the special return procedure.
• ZIMRA public notices on CGT clearance before transfer and on capital gains withholding tax.